Key changes in PSE index bared

BusinessMirror
Miguel R. Camus

THREE new firms will join the 30-company Philippine Stock Exchange index (PSEi) after meeting the rigorous requirements set by the local bourse, read a statement on Thursday.

By November 3, the Philippine Stock Exchange Inc. (PSE), DMCI Holdings Inc. and Security Bank Corp. will officially join the PSEi, replacing Vista Land and Lifescapes Inc., Rizal Commercial Banking Corp. and ABS-CBN Broadcasting Corp.

This would also mark the first time the PSE will be included in the main index like the Singapore Exchange, Hong Kong Exchanges and Clearing Ltd. and Australian Securities Exchange among others.

“This recent review follows the same objective criteria for inclusion in the PSEi, which we have set out in 2006,” PSE president and chief executive officer Francis Lim said.

Among sectoral indices, all six sectors will have fewer member-companies by a total of 18 firms. Only two companies will be added to the six sector indices. Metro Pacific Investments Corp. and Apex Mining Co. Inc. will become new members of the holding firms and mining and oil indices, respectively.

To be included in the PSEi, a listed company must satisfy five criteria—the free float level, liquidity, volume turnover, tradability and free float market capitalization. Free float, also known as public float, refers to the portion of the outstanding shares that are freely available and tradable in the market. The free float portion should represent at least 10 percent of the outstanding shares of a listed stock.

To pass the liquidity criterion for the main index, a stock must have an average daily value turnover of not less than P5 million to be considered for index retention.

The volume turnover criterion prescribes that the total volume of shares traded must be at least 10 percent of the company’s free float shares. Read More...